Sirius Xm Holdings Inc

• FailsDemonstrated, consistent earning powerFails

  One loss year across 15 years of filings, with operating margin varying by 14% around its average.

  Why this test
• FailsHigh returns on equity without leverageFails

  Return on equity averaged 4.9%, reaching 15% in 1 of the years measured; the weakest year was -16%. The ratio is unreliable: equity was zero or negative in several years, so those years have no ROE. Only 3 years of equity are available, too few for a pass.

  Why this test
• FailsHigh returns on tangible capitalFails

  After-tax return on invested capital averaged 16% over 10 years and was 5.3% in the latest year. The latest year is below 6%, so a strong average does not offset a sharp recent fall.

  Why this test
• FailsLittle or no debtFails

  Total debt of $9.7B would take n/a of normalised owner earnings to repay; operating income covers interest 3.2×. Interest cover decided this: under 4x fails (payback alone would be a pass, at 4 years or less).

  Why this test
• FailsOwner earnings, not reported earningsFails

  Normalised owner earnings are -$185.2M, and free cash flow has averaged 292% of reported profit.

  Why this test
• FailsThe $1 retained testFails

  Each dollar retained over the period has been matched by -54.2× of market value created ($3.9B retained in total).

  Why this test
• FailsInterest rates are gravityFails

  The owner-earnings yield is -1.9% against a 10-year Treasury yield of 5.2%.

  Why this test
• Can't tellMargin of safetyCan't tell

  Normalised owner earnings are negative, so there is no cash to discount. Buffett would pass on valuing this.

  Why this test
• PassesA business that doesn't eat capitalPasses

  Capital spending has averaged 1.2× depreciation; estimated maintenance capex was $653.0M last year.

  Why this test
• PassesRational capital allocationPasses

  The diluted share count has changed by -25% a year. Shrinking means buybacks are returning value; growing means owners are being diluted.

  Why this test

Discount rate: 10-year Treasury (5.2%) plus a 3% equity hurdle. Price $27.15 on 20 Oct 2026. End-of-day prices from free public sources, may be delayed or missing.